Philippine Abaca Industry Roadmap 2018 2022
Philippine Abaca Industry Roadmap 2018 2022
Philippine Abaca Industry Roadmap 2018 2022
This roadmap sets the direction for the Philippine abaca industry. It
encompasses industry analyses, benchmarking and supply/value chain. This
roadmap identified the potential areas intended for planting and treatment
of diseases which are the two most important factors in abaca fiber
production.
The abaca farm structure is classified as a small farm which is owned and
managed by individual farmers. It has an average area of 1.6 hectare for
every farmer. There are only few farms established and managed by
cooperatives or associations with areas ranging from 10 to 100 hectares.
Almost one third of the abaca areas can be found in Region V or the
Bicol Region with 52,493 hectares. The land area is comparable to combined
abaca areas of Regions XIII, XI, XII and VI. Most of the abaca areas in Bicol are
heavily concentrated in Catanduanes, comprising more than 60 percent of
the total area of the region. At present, Catanduanes is the biggest abaca
producing province contributing 35 percent of the total production, followed
by Davao Oriental with about 8.5 percent. Due to frequent typhoons in Bicol
and Leyte, there are moves by some abaca factories and investors to look for
alternative areas to plant abaca.
Since 1991, local pulp mills had been importing abaca and sisal fiber
from Ecuador except in 2005. The pulp processor resorted to importation to
address the deficiency in local supply of specific grades and meet buyers’
specifications.
Harvesting is done every six months for the typical farm and every three
to four months for the good farm. The first harvest is done on 18-24 months
after planting.
In 2016, the country’s exports of raw abaca fiber to the UK reached 2,477
metric tons (MT) valued at US$ 3.54 M, which represented 56 percent of the
total exports of raw abaca fibers. The computed export parity price ratios to
the UK market for grades S2, I, G and JK are 1.04, 1.13, 1.25 and 1.71,
respectively, which indicates the price competitiveness of Philippine abaca
in the said fiber grades. Another important edge of Philippine abaca is that of
having more quality grades. The Philippines has nine grades/classifications of
abaca fiber compared to only five of Ecuador, making Philippine abaca more
versatile in applications. Philippine abaca has a wide range of utilization from
the traditional cordage/rope and fibercrafts to more sophisticated industrial
applications like specialty papers, textile and the emergent bio-composites
and nanocellulose. The different grades allow the specialty papermakers
flexibility to produce different types of paper and other by-products with the
desired quality.
The Vision:
The Mission:
• Maintain the country’s status as the world’s number one producer and
supplier of quality abaca fibers.
Goals
• Set new direction and agenda for R & D to improve varieties, increase
fiber production, disease treatment, postharvest, processing, tensile
strengths and utilization towards production of fiber by-products for
industrial, commercial and other uses;
Objectives
Lack of Planting Materials. This is the main problem of the PhilFIDA because of
its dependence to tissue culture planting materials, low seedbank
seedling production and disease infected planting materials. Currently,
the PhilFIDA can only produce maximum of 500,000 planting materials
versus demand deficit of 146.28M planting materials requirement. It
would take the industry about 292 years to acquire said requirement.
Low Fiber Production. Majority of abaca farms are far from the farmer’s
residences and harvesting is only done 2 times a year in some areas.
Century-old harvesting device and tools, and spindle machines are used
during post-harvest and needs to be improved to produce more quality
fibers.
Low Fiber Quality. The quality of Philippine fiber has deteriorated over the past
years because of “all-in buying” practice and also because of the
existence of commercialized spurious abaca varieties.
New Strategies
• The Abaca Tuxy Buying Scheme. This scheme will ensure the survival of
abaca which is indigenous to the Philippines. This aims to organize and
empower most of the abaca farmers nationwide as a cooperative,
produce their own abaca fibers as a group which will redound to better
competitive price, quality and quantity and sell their harvest directly to
Grading and Baling Establishments (GBEs) and local processors.
The ED will be the prime mover that shall direct all operating units of the
agency to perform the planned programs, projects and activities stipulated
in the roadmap and agreed upon with the stakeholders during the various
consultations. The ED shall report to the DA Secretary regularly the
progress of implementation and accomplishments of the roadmap.
INTRODUCTION
A. Rationale
B. Objectives
2. Present new approaches, direction and policy such technologies for farm
production, seedling production and treatment of diseases;
1. Data Sources
The crafting of this roadmap was based on the prescribed format, data
and information provided by the PhilFIDA, High Value Crops Program of the
Department of Agriculture and consultants from the University of Asia and the
Pacific. The data for this expository study were gathered from both primary and
secondary sources. The new administration made revisions to update the
data.
Analysis of data for all the chapters in this roadmap were done using the
available statistics. These data were explained using graphs and figures.
2. Area Coverage
3. Analytics
Target Setting. This portion includes the vision, mission, objectives and
targets (area, income and job generation).
Strategies and Policies. This covers the critical key result areas which
have to be addressed along the supply chain to enable the industry to meet
the targets.
4. Limitation
Abaca fiber is a raw material being used for industrial products such as
pulp and paper, cordage, fibercrafts, nanocellusoe and many others. As a
limitation, the value chain analysis covered only up to raw fiber or primary
processing.
INDUSTRY SITUATIONER
Region V or the Bicol Region has a total land area of 49,531 hectares.
This land area is comparable to combined abaca areas of Regions CARAGA,
Davao, SOCCSKSARGEN and Western Visayas. Most of the areas planted with
abaca in Bicol Region are heavily concentrated in Catanduanes comprising
47 percent of the total area for the region. However, 33,136 hectares of abaca
THE PHILIPPINE ABACA INDUSTRY ROADMAP 2018-2022 6
in Catanduanes were damaged by Typhoon Niña in December 2016. It is
expected that fiber production will reduce significantly. To illustrate, the total
land area for Northern Samar alone is already comparative to a little more
than the total land areas planted to abaca in SOCCSKSARGEN and Western
Visayas. Second to Bicol Region is Eastern Visayas with a total land area of
45,527 hectares dedicated to growing abaca.
In 2013, Glatfelter was already looking for alternative sites for planting of
abaca as its main supplier, Catanduanes, is always visited by typhoon.
Glatfelter was recommending Panay to be developed because of its quality
fiber. The target expansion areas are concentrated mainly in less-typhoon
visited provinces where abaca is suitable.
Data revealed that only 13 percent of the abaca farmers use fertilizer in
growing abaca. Majority of the farmers or 87 percent do not apply fertilizer at
all and they depend only on the available soil nutrients. To those farmers who
apply fertilizer, 11 percent use organic fertilizer while 2 percent use the
inorganic ones.
Noting for a fact that farming is one of the major livelihood in the
Philippines, land areas for abaca farming are most, if not all, are being shared
with some intercrops. Record shows that a combination of banana and
coconut are the most common intercrops of abaca with 44
percent. This can be logically traced since these crops are
grown in almost the same condition with abaca thus farmers
tend to do intercropping to provide alternative sources of
income. Next to the combination of banana and coconut,
dominantly banana comes as the second most common
intercrop at 16 percent. Only 2 percent of the abaca farms
are intercropped with root crops.
As part of the normal farming process, the specific market to which the
abaca farmers sell their abaca fiber is also determined. Study reveals that 85
percent of farmers sell their fibers in barangay and town traders. Only 2 percent
sell their produce to GBE’s and less than 1 percent to abaca processors.
B. Performance
The top five abaca producers from 2006-2015 were Catanduanes, Leyte,
Northern Samar, Davao Oriental and Surigao del Sur. In 2015, the leading
producers of abaca were the provinces of Catanduanes, Davao Oriental,
Northern Samar, Lanao del Sur and Davao del Sur.
As shown in Figure 6a, the ARMM has the highest yield for the past ten
years with 718 kilogram per hectare per year followed by Davao Region with
509 kilogram per hectare; Figure 6a. Top Regions in terms of yield,
Bicol Region with 455 2006-2015
kilogram per hectare and
Eastern Visayas with 358
kilogram per hectare.
Likewise, Figure 6b shows
that Northern Mindanao is
the highest producing
region in terms of yield for
the year 2015 with 1,255.2
kilogram per hectare
followed by ARMM with
981.6 kilogram per
hectare which is higher
than the 10-year average
yield.
2. Prices
The price of abaca fiber depends on the manner of extraction, whether
hand- stripped or spindle-stripped, and on the fiber grade based on cleaning.
Fiber Grade
Excellent AD, EF, S1, S2
Good I, G, H
Fair JK, M1
Course L
Residual Y1, Y2, O, T, WS
Decorticated Fibers AD1, AD2, AD3 and AD4
The pulp sector consistently remained as the growth area of the abaca
industry utilizing an average of 37,043 MT or 75.2 percent of the annual
average local consumption and increasing at a minimal rate of 0.4 percent
per annum. The pulp millers’ utilization level is highly dependent on the
demand for pulp by the specialty paper manufacturers abroad as abaca pulp
is the raw material used in meat and sausage casings, tea/coffee bags, k-
cups, bags, cigarette paper, currency paper, nancocelluse, polyester and
other specialty papers. Processing of pulp into specialty papers is done in
Europe, the US, Japan and China as there is no available processing facility in
the country.
4. Trade
Exports
For the past ten years, the Philippines generated an average of US$100
million per year from the exports of abaca fiber and manufactures. Some 87
percent or an average of US$87 million came from abaca manufactures such
as pulp, cordage, yarns, fabrics and fibercrafts. The rest (13 percent) was from
raw fiber exports with yearly average earnings of US$12.94 million.
Abaca Fiber
On the other hand, India and Indonesia had consistently been buying
abaca fiber although the shares were very minimal at one percent each.
Abaca fiber is used as raw material in the manufacture of cordage and
fibercrafts in these countries. China’s share accounted for 11.4 percent (1,122
MT) of the overall Asian trade and is presently the second biggest Asian market
for Philippine abaca fiber. It is now using the fiber in the manufacture of tea
bag, capacitor paper and fibercrafts.
In 2013, export of abaca fiber recorded its lowest value of 4,456 MT far
from the 10-year average of 9,841 MT. In that year, UK was the highest importer
with 1,936 MT or 57.88 percent of the total volume.
Europe is the most important destination for Philippine abaca pulp since
it is home to a number of specialty paper manufacturers. Exports to Europe
averaged 16,454 MT per year or 80 percent of the total, with 7,420 MT or 36.4
percent being absorbed by Germany.
China and Taiwan consistently imported abaca pulp during the last ten
years. Their shares though were fairly minimal at 4.9 percent and 0.6 percent,
respectively. Imports of China significantly increased in 2011 to 2,265 MT from
1,045 the previous year and grew at a considerable rate of 20.9 percent per
year. South Korea’s imports were in small quantities only.
Abaca pulp imports of the US, the third biggest market for Philippine
abaca pulp, averaged 1,201MT or a share of 5.9 percent to the annual
average during the ten-year period. Abaca is currently utilized in the
Exports of abaca pulp averaged at 20,382 MT for the ten-year period. The two
top importers were Germany and the UK with 7,420 MT and 4,686 MT,
respectively.
Tea Bags
From 2006 through 2015, exports of abaca cordage and allied products such
as ropes, cables and twines averaged 6,355 MT per year. Shipments were
decreasing at 6.7 percent annually. The stiff competition posed by cordage
products made of synthetics and other cheaper natural materials continued
to affect the country’s abaca cordage industry.
The US absorbed the bulk of the exports accounting for 64.2 percent or
an average of 4,100 MT. Singapore, Canada, the United Arab Emirates, the UK,
Germany, Malaysia and Australia consistently remained as the other major
markets for Philippine cordage (Figure 13).
Abaca Fabrics
Hong Kong was the biggest market, importing an average of 200,509 sq.
m. per year or 51.8 percent of the annual average. It was followed by Italy
with average purchases of 111,221 sq. m. or 28.7 percent of the total. China,
which began its fabric importation only in 2002 but on irregular basis, emerged
as the third biggest market from 2007 until 2011 with an annual average of
36,339 sq.m. with 9.4 percent share. Its imports in 2011 however, slumped
to 69,461 sq.m. and further dipped to 20,658 sq.m. in 2012.
Imports
Since 1991, local pulp manufacturers had been importing abaca fiber
from Ecuador except in 2005. The pulp processors resorted to imports to
address the deficiency in local supply of specific grades and meet pulp
buyers’ specifications. In 2012, abaca imports fell by 68.3 percent against
the 10- year period average to only 103 MT valued at US$ 105,147. Imports
gained a peak in 718.3 MT valuing at US$1,078,342 million. Imports continued
to increase in 2014 at 1,039.5 MT being the highest record in 10 years having a
value of US$1,773,803 million.
A. Production Costs
Establishment cost is PhP 38,295 for the typical and PhP 68,045 for the
modern farm including 10 percent allowance for mortality of planting
materials. The planting densities are at 1,000 hills per hectare both for typical
and modern farm. An average labor and material cost of PhP14,700 and
PhP19,075 for typical farming and PhP 19,250 and PhP 43,075 for modern
farming, respectively will be incurred. Additionally, logistics and land lease
amounts to PhP 4,520 and PhP 5,720 for typical farm and good farm,
respectively.
Total maintenance cost is PhP3,775 for the typical farm and PhP 22,425
for the modern farm. On the typical farming, weeding and under brushing are
done only once during harvesting of abaca. No fertilizer application and pest
control are being performed by the farmer. While on the good/modern
farming, weeding and under brushing are done three times a year.
Pesticide/insecticide application at the rate of one liter per hectare is done
twice a year to prevent the occurrence of pest and diseases. Three bags of
urea fertilizer are being applied three times a year.
Average harvesting cost per year for typical farming is PhP 16,450 while
good farming has an average harvesting cost of P 12,250. At the farm level,
only primary processing is undertaken. This involves the extraction of fiber from
the harvested tuxies. The two methods of extraction are being used hand
stripping for typical farming and mechanized stripping for good farming. Drying
is done through air drying. The abaca fiber recovery of 1.5 percent is used using
“0” serration standard stripping both in hand hagutan and mobile spindle
machine.
Average yield during the productive years (2-10 years) of 667 and 1,334
kilogram per hectare are produced from typical and good farming showing a
667 kg gap favoring the latter practice. The abaca fiber is being sold to trader
processors/exporters at an average price of PhP60 per kg. A total of PhP36,000
gross income is gained from typical farming while PhP86,400 is gained from
good farming. There is a gap of PhP50,400 favored to good farming. After
deducting the expenses, typical farming gained an average net income of
PhP13,390 per hectare compared to PhP34,470 with good farming. There is
a noticeable gap of PhP21,080 between the two farming practices.
The internal rates of return for the typical and modern farms are 39 and
44 percent, respectively. Payback period for the typical farm is 5.22 years
compared to 4.03 years for the good farm. Good farming is the better
practice.
The segments along the supply chain are identified by players and their
main functions.
Tools and Equipment. Tools and equipment such as bolo, rake, spade,
power sprayer, grass cutter and others will be supplied from the accredited
dealers of farm tools and machinery equipment, hardware stores and
agricultural supply stores in the locality.
Farmers cultivate land, fertilize, maintain and harvest abaca stalks for
primary processing of producing abaca fiber. It involves farm activities such as
area selection, land preparation (underbrushing, digging of holes, and
layouting), planting, farm management (weeding, pest and disease control,
fertilization and trimming of dry leaves) and harvesting (topping of leaves,
tumbling, hauling and piling).
This process includes extraction of abaca fiber from the stalks (tuxying,
stripping by manual or machine operated, decorticating), drying of fibers and
THE PHILIPPINE ABACA INDUSTRY ROADMAP 2018-2022 25
bundling. This will be done by the farmers, skilled strippers and laborers. Hand
hagutan tools will be used for manual extraction while spindle-stripping
machine and decorticating machine for mechanized extraction process.
These will be all procured from accredited fabricators in the locality.
A.4. Trade
A.5. Market
This involved the buying/selling of classified and graded abaca fibers for
processing into end products. Players involved are exporters and local
processors (for pulping, cordage, fibercrafts, etc.)
A.6. Logistics
Logistics covers services for the transport of graded and baled abaca
fibers to end- users, processors and exporters.
The processes and players in the value chain map for good farms are
totally different from the typical farms. There are some crucial factors that are
added/changed in some segments enumerated in the value chain map. For
good farms, farmers will use suckers or corms and seeds as planting materials
as part of their inputs, their production activities will involve the application
of organic liquid fertilizers and farmers observe good agricultural practices in
improving their farms with regards to growth and treating diseases. Also, in the
primary processing, fibers will be mechanically stripped using high capacity
machines. And with the use of stripping machines, accredited fiber extraction
machine fabricators will be one of the important players in the value chain
map for good farms. With these crucial factors, farmers will have a modern
system of farming that will greatly increase the volume of abaca fiber
production.
Figure 18. Intensive farm: Value chain map of abaca (Processes and Players)
Farmers
Strippers
Classifiers
Classifiers sort and grade the fiber based on the standards set by the
government. They are trained by the PhilFIDA.
Traders
As of 2016, there are about 750 licensed traders and 23 licensed trader-
exporters.
Fiber Exporters
Processors/Manufacturers/Pulp Millers
Cordage Manufacturers
There are currently six cordage firms operating in the various parts of the
country: two in Metro Manila, one each in Laguna, Albay, Cebu and Davao.
They use abaca fiber as the principal raw material for rope, cordage and twine
manufacturing. Blending with other natural fibers like maguey is done
depending on the specifications of the buyers.
Fibercraft Processors
Other Processors
Figure 19. Typical farm: Value addition of abaca (Abaca Fiber Production)
Figure 21. Intensive farm: Abaca value chain, (PhP/kg fiber) Philippines 2015.
CHAIN NODE COST PhP/kg VALUE ADDED PhP/kg PROFIT MARGIN PhP/kg
Farm Production Cost of material inputs 1.00 Farmgate selling price 50.00
Labor cost 12.79 cost of inputs 1.00
maintenance 1.04 cost of farm labor 12.79
topping, tumbling and piling 2.50 land lease 2.08
tuxying and hauling 7.50
farm tools (depreciation) 1.74 15.87
Land lease 2.08
= Total production cost 15.87 = Profit Margin 34.13
CHAIN NODE COST P/kg VALUE ADDED P/kg PROFIT MARGIN P/kg
Farm Production Cost of material inputs 7.15 Farmgate selling price 50.00
Labor cost 7.25 cost of inputs 7.15
maintenance 1.74 cost of farm labor 7.25
topping, tumbling and piling 1.25 land lease 0.69
tuxying and hauling 3.75 logistics 0.42
farm tools (depreciation) 0.51 15.51
Logistics 0.42
Land lease 0.69
= Total production cost 15.51 = Profit Margin 34.49
Department of Agriculture (DA) To help promote the production, processing, marketing and
and AMAS distribution of high value crops such as abaca. It also provides funds
for special projects.
DA Regional Field Units To provide assistance and finding support in the implementation of
various agricultural policies and programs related to the production,
processing, marketing and distribution of high value crops such as
abaca.
Local Government Units (LGUs) To take charge of all the extension activities and
will be directly providing technical assistance to farmers in the field.
Some LGU provide counterpart funds for nursery establishment and
abaca planting.
Non-government Organizations To provide funding support in the implementation of programs
and projects in the regions especially in the mobilization of farmers,
(NGOs)
provision of land for the establishment of abaca nurseries and other
fiber production facilities.
Credit cooperatives and other To provide financial support to farmers and help them increase their
income, support marketing and construction of access roads to
government financial institutions
mountainous areas and in creating more livelihood opportunities.
(LBP, ACEF, ACPC, & HVCDP)
State Universities and Colleges To help in performing extension work and especially in
(SUCs) and Department of conducting research on sustainable abaca production techniques.
Science and Technology (DOST)
Department of Environment and To help in the expansion of abaca farm on areas covered by the
National Convergence Initiative (NCI) Programs and National Greening
Natural Resources (DENR) and
Program.
Department of Agrarian Reform
(DAR)
Department of Trade and Industry To oversee the implementation of abaca agreements
between the Philippines and other countries and to also act as the
(DTI) and CITEM marketing and promotional arm of the abaca industry.
Bureau of Plant Industry Provides assistance in the regulation of quality
standards for the abaca industry.
Philippine Statistics Authority, Provide foreign trade and export statistics.
Bureau of Customs
BENCHMARKING ANALYSIS
This chapter covers global and local benchmarking and compares the
performance of typical and modern farming using qualitative and quantitative
parameters. The qualitative parameter mainly describes farm practices
instead of cropping system, planting materials, pests and disease control
and fiber extraction method. The quantitative analysis focused on
measurable aspects such as density of planting, input usage and financial
indicators.
A. Global Benchmarking
PHILIPPINES ECUADOR
Average export
Hand-cleaned non-Davao unit value
S2 G JK (all grades)
A.2. Philippine abaca versus other natural fibers (jute and sisal)
Admittedly, the price of abaca is much higher than other natural fibers
like jute and sisal and is actually the envy of other fiber producers as
acknowledged during the Eight International Conference of the European
Industrial Hemp Association (EIHA) held in 2011 in Wesseling, Germany. The
biggest advantage, however, of abaca over its competitors is its superior
qualities. Quality considerations play a predominant role in the choice of fiber
for the major specialty end-uses and technical properties provided by
abaca outweigh price advantages of other natural fibers.
In the pulp and specialty paper industry, abaca is the most sought after
and is actually the principal raw material because of its desirable qualities
which meet the requirements in the manufacture of specialty paper
products. Most specialty papers require high porosity and excellent tear,
bursting and tensile strength, all of which abaca can impart. Specifically, in the
production of meat/sausage casings and coffee/tea bags there are very
stringent specifications on strength, elongation and formation required to
ensure correct performance on automatic filling machines that these casings
must be made entirely of abaca. Furthermore, sisal, the closest competitor of
abaca in specialty paper manufacturing, has shorter and thinner cells,
and, therefore, produces paper with lower tensile strength than abaca-based
paper of the same weight per area. Sisal likewise gives rise to knots which
makes it unsuitable for the production of very thin papers and, therefore,
cannot replace abaca in uses like meat/sausage casings. These casings and
coffee/tea bags are the two major markets for abaca pulp.
Table 6. Representative monthly export prices of jute fiber, 2010/2011
A typical farm uses suckers while the modern/good farm uses tissue
culture plantlets as planting materials. This gives an additional cost of P10.00
for the good farm.
A total of 1,000 abaca plants with a distance of 3.0 x 3.0m are being
planted to one hectare on both farming practices - typical and good/modern
farming. Care and maintenance of the plantation in typical farming is very
minimal compared to good farming. A total of P29,750 gap was realized in
the fertilizer application, weeding, under-brushing and pest diseases control in
which all expenses were incurred in good farming .
Average yield of 667 and 1,334 kg per hectare were produced from
typical and good farming showing a 667 kg gap favoring the latter practice.
The produced fibers were sold to trader processors/exporters at an average
price of P60.00 per kilo. An average cash inflow of PhP36,000 was gained from
typical farming while P86,400 was gained from good farming. There was a gap
of PhP50,400 favoring good farming. After deducting the expenses incurred in
typical farming at PhP22,610, the average net income of PhP13,390 per
hectare was obtained which was lower compared to PhP34,470 with good
THE PHILIPPINE ABACA INDUSTRY ROADMAP 2018-2022 47
farming spending PhP 67,151 per hectare on the average. A noticeable gap
of P24,545 between the two farming practices was realized.
Payback period for typical farm is 5.22 years compared to 4.03 years for
good farm. The internal rates of return for the typical and modern farming are
39 and 44 percent respectively which shows that good farming is the better
practice.
COMPETITIVE ANALYSIS
Price competitiveness
Table 10. Abaca Fiber Competitiveness Under Export Trade Scenario, Philippines in
United Kingdom, 2012
The export parity price to domestic wholesale price ratio was calculated
to determine price competitiveness. The computed ratio of UK market for
grade S2 was greater than one at 1.04 which would indicate price
competitiveness.
The results for grades I, G and JK are the same with export parity price
ratio of 1.13, 1.25 and 1.71, respectively indicating price competitiveness in all
fiber grades.
The growing global interest and acceptability for “green” products open
urgent and endless opportunities for natural fibers as these are alternative
resources that can be utilized for a wide range of applications especially for
the pulp and paper industry, in the composite market, textile and even in
lifestyle products and other industries. The emergent green economy is
creating a global demand of an estimated three million metric tons of natural
fibers and in support to this, various international industry report revealed the
following trends and prospects which favor the Philippine fiber industry:
Currently, Daimler-Chrysler is using abaca fiber for the spare wheel pan
cover for all models of their A- and B-class passenger cars and the yearly
consumption for this purpose, according to its External Affairs and P ublic Policy
Director, amounts to approximately 100 to 150 metric tons of abaca fiber.
General Motors is another prospective market for natural fibers as part of
its commitment during the United Nations Conference on Sustainable
Development.
Asia is emerging as a big market for natural fiber composites due to the
rapidly increasing demand particularly from China and India. Auto parts
manufacturing companies based in the ASEAN specifically, in Malaysia,
Indonesia and Thailand could be the target markets for Philippine natural fibers
THE PHILIPPINE ABACA INDUSTRY ROADMAP 2018-2022 53
as these countries have flourishing car manufacturing industries and
considering their proximity to the Philippines, the world’s dominant supplier of
abaca.
D. TEXTILE
F. OTHER PRODUCTS
In the Philippines, Republic Act No. 9367 known as Biofuel Act was
passed in 2007 requiring oil companies to use biofuels in all “liquid fuels for
motors and engines sold in the Philippines”. As such, all gasoline sold in the
country must contain at least 5 percent ethanol and 10 percent ethanol. With
the enactment of this, the country will be needing 500 million liters of ethanol
a year. However, the combined production of the three ethanol plants
operating in the country is only 79 million liters and in the next one to two years,
three more ethanol distilleries will operate with a combined capacity of 133.4
million liters. With the combined expected output of the six plants, there will still
be a deficit of about 288 million liters annually.
Health and wellness products like bath soap and lotion as well as
organic fertilizer, pesticide and
disinfectant can be made from
enzymes/sap/extract from extraction
wastes and other plantation wastes.
The upcycling of these agricultural
wastes gives economic importance
among farm families as these could
provide supplemental income for them
while at the same time solving their
problem on waste management and
disposal.
G. SUSTAINABILITY CERTIFICATION
SWOT ANALYSIS
On Input Supply
The high cost of labor, utilities, farm inputs such as fertilizers and
pesticides, farm implements such as stripping devices serve as weaknesses to
inputs of production. The limited access to credit is also a weakness. The
stringent documentary bank requirements compels farmers to resort to local
informal lenders who provide easy access to loans but at high interest rates.
On production
On Processing
The increasing global awareness on green economy augurs well for the
abaca industry; abaca, being a natural fiber can be used to an array of
emergent applications such as panel boards of automobiles and yachts;
needle-punched denims and in pharmaceutical products.
As the lead agency, PhilFIDA works closely with the farmers and the
private sector to ensure strong linkages among the players in the supply chain.
Regular stakeholders meeting with the farmers and private sector are being
conducted by PhilFIDA.
As a natural fiber, abaca competes with other hard fibers such as sisal,
kenaf and other bast fibers that are cheaper in the global market.
Cross-cutting
INPUT SUPPLY Available new and improved High cost of labor, farm Introduction of abaca seeds can support Distribution of tissue
technologies particularly on inputs, the needed planting materials cultured and other
planting materials machineries and utilities materials that produce
poor quality fibers.
Limited access to credit LBP is reviewing it policy to support The government has to
abaca establishment. PRDP and other fulfill its obligation to
agencies provided grants in production support affordable
and trading. credit
PRODUCTION Existing and potential areas for Farmers treat abaca as Growing need for Climate change
abaca augmentation crop plantation type approach to production
Third party certification on Presence of pests and Introduce new approach in treatment of Peace and order
sustainability diseases pest and diseases situation
Increasing social
consciousness for CSR by some
private companies
CARP limits land DAR support projects for abaca in
Ownership suitable areas
PROCESSING High cost of investment Superior quality of Use of chemicals in
abaca fiber processing of fibers in
the factories.
Offers zero-waste
utilization
Cross cutting High multiplier effect on job Abandonment of abaca farms by Responsive to
generation young farmers promoting gender
equality & women
empowerment
The Vision:
The Mission:
• Maintain the country’s status as the world’s number one producer and
supplier of quality abaca fibers.
Goals
B. Targets
The demand for abaca fiber both in the local and international market
is increasing exponentially because of the shifting in preference for natural
rather than synthetic fiber materials. The utilization of natural fibers have also
diversified from food packaging, textiles, furniture, stuffing material and many
more.
Area Targets
To cater the increasing demand for abaca fibers, vast hectare of abaca
farms which were cleaned from abaca diseases, old and less productive
abaca farms, are targeted to be rehabilitated nationwide. A total of 69,364
and 44,167 hectares are aimed to be rehabilitated in 2018 and 2019,
respectively. Further, disease management activities will likewise be
conducted.
Income Targets
In terms of job generation, a typical abaca farm can generate 0.5 job
per hectare on the first year or during the establishment of the farm. It can then
generate 0.64 job per hectare on its second year, wherein replanting occurs,
and 0.61 job per hectare for minimal harvesting activities on the third year. At
least 1.17 jobs per hectare will be generated from the fourth until the tenth year
of abaca production. An average of 1.05 jobs per hectare is expected to
be generated for a 10-year period of abaca fiber production in a typical
farm.
Good abaca farms can generate one job per hectare during the
first year of farm establishment. It will decreased to 0.76 job per hectare on
the second year since replanting and farm maintenance require less labor.
Needed jobs will then be increased to 4.21 per hectare on the third year for
extensive harvesting. A total of 5.62 jobs per hectare will be generated from
the fourth until the tenth year of abaca production. In these years, an
average of 4.93 workers will be employed in which full abaca fiber production
is obtained and the maximum number of jobs is generated. These will be
achieved mainly because farmers will utilize fertilizers and pesticides and will
perform good agricultural practices in maintaining their good abaca farms.
A. On Input Supply
B. On Farm Production
A lot of abaca farms are infected with bunchy top, abaca mosaic and
abaca bract mosaic. These are viral diseases caused by aphids. Infected
abaca plants stay stunted thus no fiber can be harvested. The disease
incidence ranges from 2-71 percent. Eastern Visayas is the hardest hit with 66-
71 percent rate. To control the rapid spread of the disease, PhilFIDA (then FIDA)
has implemented a 5-year “Abaca Disease Management Project “(ADMP)
starting in 2009 in coordination with the concerned Local Government
Units. The objective is to bring down the disease incidence to less than five
percent, a level that is manageable by farmers to control by rouging.
The eradication process makes use of green label insecticide spray to control
the vector and by piercing glyphosate-soaked bamboo sticks into infected
plants. Monitoring of the effectiveness of the treatment is conducted to
provide information as bases for decision for retreatment if needed or to
account for disease-freed abaca farms and consider for rehabilitation/
replanting.
• Trainings
Some farms are under harvested either due to low price or lack of
manpower to do the harvest. In case of the latter, the employment of
harvester brigade can also bring increased production especially in locations
THE PHILIPPINE ABACA INDUSTRY ROADMAP 2018-2022 70
where abaca is quite new. A harvester brigade is a group of experienced
harvesters and fiber strippers from provinces that has long been producing
abaca such as in Bicol or in Leyte who can be hired by plantation owners such
as in Zamboanga or in relatively new abaca areas in the Regions.
C. On processing
D. On Trade
E. On Market
• Conduct of trainings
Supply Time
Performance
Chain Key Result Areas Action Programs Frame/ Working
Indicator Group
Segment
INPUT Adequate supply of disease-free and high yielding abaca planting materials 2018
SUPPLY
Establishment, # of technicians Investment in the establishment and PhilFIDA, SUCs, LGUs,
Maintenance and trained operationalization of tissue culture Farmers
operationalization - @ least 15 technicians per laboratories, seedbank-cum- Associations
of facilities for the training and 4 trainings per year experiment stations, screen houses,
production of high starting 2017 nurseries, diagnostic laboratories
yielding and disease- and immunology laboratory
free abaca
planting materials Abaca planting material production
# of accredited producers
- @ least 2 per year starting and distribution
2017
# of technicians
trained
- @ least 15 technicians per
training and 4 trainings per year
starting 2017
Development of
clonal propagation # of accredited producers
protocols for - @ least 2 per year starting
disease-free abaca 2017
planting materials
# of accredited producers
- @ least 2 per year starting 2017 Accreditation of abaca planting PhilFIDA, SUCs, LGUs
materials producers Farmers Associations
BPI-PQS
Investment and
maintenance of R & D
facilities
Available
production technologies for improved fiber yield, higher
farm productivity and increased farm income
Generation and # of researches Investment on Rand PhilFIDA,
dissemination of conducted D on abaca-based sloping agriculture SUCs DA- BAR, DOST-
cost-effective land, integrated PCARRD
package of farming/cropping
technology for system, on pest and disease
fiber management, bio-control agents,
production
especially on organic fertilizers as well as
climate change indigenous knowledge.
adaptation
Time
Supply Performance Action
Key Result Frame/
Chain Indicators Programs Budget (PhP'000)
Area Working
Segment
Group
Farmers No. of farms/ Support to 2018-2022 5,000 10,710 11,246 12,400 13,200
Certification farmers certified acquire certification for abaca
2018 – 4 on sustainable production PhilFIDA
2019 – 40
2020 – 40
2021 – 40
2022 – 40
Capable Fiber No. of PhilFIDA Training on Technology and 2018-2022
Development field personnel Technical Assistance Processes 2,200 5,000 5,000 5,000 5,000
Officers (FDO) on trained for PhilFIDA Field personnel PhilFIDA,
providing LGUs, ATI,
technical SUCs
assistance to
clients
Farmers with No. of farmers Capability 2018-2022
updated trained building for farmers through 1,350 3,000 3,150 3,300 3,375
knowledge training on updated abaca PhilFIDA,
and skills on production and livelihood LGUs, ATI,
production technologies SUCs
technologies of
abaca.
Updated, No. of IEC Production and distribution 2018-2022
informative and materials of IEC materials 870 1,000 1,100 1,150 1,200
effective IEC produced and PhilFIDA,
materials distributed LGUs, ATI,
SUCs, PTV
PROCESSING
Supply Key Result Area Performance Action Programs Time Frame/ Budget ('000)
Chain Indicators Working
Segment Group
TRADE 2018 2019 2020 2021 2022
Number of
permits, licenses
and accreditation
acted upon
- licenses Traders201
(Trader No. licenses issued Inspection 8-2022
Exporters, , Exporters,
Processors, Processors,
Classifiers) Classifiers
No.of permit to
- Permit to Inspection
transport 2018-2022
transport fibers Traders,
Fiber
Exporters
- Primary No.of
Certificates of primary certificates Certification 2018-2022
Fiber inspection Traders,
(PCFI) Exporters
1. Lack of Planting Materials. This is the main problem of the PhilFIDA because of
its dependence to tissue culture planting materials, low seedbank seedling
production and disease infected planting materials. Private sectors,
Indigenous People and upland farmers need millions of planting materials for
their farms.
Solution 3: PhilFIDA shall tap Land Bank of the Philippines and other financial
institutions for possible financing for abaca plant production with low interest
rate of less than 7 percent and long gestation payment of 5-7 years so more
farmer groups and private sectors can benefit. Eligibility of farmers groups must
also be changed and with no collateral. Farmers organizations must be
responsible for collection and payment of loans.
Solution 1: Introduce a zero percent virus disease incidence in all abaca farms.
3. Low Farm and Fiber Production. Majority of abaca farms are far from the
farmer’s residences and harvesting is only done 2 times a year in some areas.
Century-old harvesting device and tools, spindle and decorticating machines
are used during post-harvest and needs to be improved to produce more
quality fibers.
G. New Policies
PhilFIDA will introduce new directives and policies to increase fiber production,
improve fiber quality, and strengthen partnership with all sectors of the industry.
• The Abaca Tuxy Buying Project. This will ensure the survival of abaca which is
indigenous to the Philippines. This project aims to organize and empower most of
the abaca farmers nationwide as a cooperative, produce their own abaca fibers
as a group which will redound to better competitive price, quality and quantity
and sell their harvest directly to GBEs and local processors.
This will also strengthen the cooperativism approach which is an effective tool in
the implementation of government projects and interventions. This will create
additional benefits and advantages to all members.
• Encourage more farmers, private sectors, NGOs, corporations and big land owners
to plant abaca in their areas identified under National Color-Coded Agricultural
Guide Map launched by AMIA.
• Introduce an intensified disease management program that will revive and nurture
abaca plants. An improved approach in the treatment of abaca diseases such as
bunchy-top, bract mosaic and mosaic through prevention and medication.
• In terms of seedling supply, at present, very few planting materials are available
for abaca farms and there are few commercial nurseries that are accredited by
PhilFIDA and Bureau of Plant Industry (BPI). With the large number of interested
groups to plant abaca this 2018, private sectors, NGOs and farmer groups are
encouraged to undertake early planting so that many suckers will be produced.
There must be adequate planting materials that are of disease-free and high
yielding varieties derived from tissue culture and seeds. New and improved nursery
management technologies, quality abaca varieties, new technologies to improve
fiber yield and increase farm productivity will also be introduced.
• For processing, the focus will be on the establishment of fiber stripping centers and
abaca drying sheds as Common Service Facilities (CSF); Conduct training of
farmers on fiber pre-classification, safe use and maintenance of fiber extraction
machines; and harvesting brigades will be organized.
The total investments for the input supply, fiber production, fiber processing,
fiber quality competitiveness and fiber trade aspects of the abaca industry are
estimated at PhP5.63 billion from 2018-2022.
Fiber
1,515,486,520 964,965,000 885,821,000 224,112,000 70,000,000 3,660,384,520
Production
Fiber
Processing and 229,235,000 170,465,000 10,000,000 10,000,000 10,000,000 429,700,000
Utilization
Research and
6,344,000 6,344,000 6,344,000 6,344,000 6,344,000 31,720,000
Development
Fiber Trade - 750,000,000 - 750,000,000 - 1,500,000,000
Fiber Quality
2,261,000 2,261,000 2,261,000 2,261,000 2,261,000 11,305,000
Competitiveness
The Executive Director (ED) is the prime mover that shall direct all
operating units of the agency to perform the innovative planned programs,
project and activities stipulated in the roadmap and agreed upon with the
stakeholders during the various consultations. The ED shall report to the
Secretary of the Department of Agriculture and the USEC of the High Value
Commercial Crops regularly the progress of the implementation and the
accomplishment of the plans in the roadmap.
1. Research Division;
2. Technical Assistance Division;
3. Regulatory Division; and
4. Fiber Utilization and Technology Division.
The fiber processors that include pulp millers, makers of cordage and
related products, handicraft makers, weavers and users of by-products
and other fibercrop derived substances like the enzymes, seed oil and
bioethanol are the converters of the raw materials from fibercrops into value
added goods. Processors shall be encouraged to organize themselves so
that they can develop transactional strength and negotiating power. The
pulp millers have an established organization called the Association of the
Abaca Pulp Mills Inc. (AAPMI).
The roles of the support divisions are to assist the technical divisions and
to undertake internal monitoring of the implementation of the roadmap’s
planned programs, projects and activities.
C. External Monitoring
2006 66,471 14 55 101 20,027 1,588 325 23,521 117 1,658 8,379 675 5,547 4,465
2007 60,723 28 51 95 15,695 1,693 348 23,571 172 1,244 8,006 648 5,517 3,655
2008 77,389 72 69 84 21,972 2,281 789 23,588 251 2,318 10,229 1,282 9,958 4,494
2009 54,584 41 77 103 21,169 1,991 416 14,091 265 2,239 5,842 728 3,657 3,967
2010 57,223 0.5 65 69 21,061 1,513 531 14,094 508 2,359 6,952 1,280 4,754 4,036
2011 73,274 16 81 105 27,109 2,459 529 18,718 647 2,284 7,765 1,421 6,586 5,554
2012 64,806 2 53 133 22,246 2,355 700 15,472 656 3,180 8,614 1,380 4,524 5,489
2013 55,958 - 46 126 23,352 1,930 495 11,093 530 2,113 5,408 890 4,175 5,799
2014 66,004 - 62 138 27,886 1,636 462 10,380 642 3,205 8,417 1,610 5,945 5,620
2015 67,329 - 55 147 25,134 1,933 592 8,418 636 4,171 11,255 1,423 6,785 6,780
-------------------- --------------- ------------ -------------- -------------- ------------ ------------ ------------ -------------- ------------ -------------- ------------- ------------ ------------ ------------
Average 64,383 25 61 110 22,565 1,938 519 16,295 442 2,477 8,087 1,134 5,745 4,986
% Share 100.0 0.04 0.1 0.2 35.0 3.0 0.8 25.3 0.7 3.8 12.6 1.8 8.9 7.7
Annual Growth
Rate (%) 0.1 (26.8) (0.1) 4.2 2.6 2.2 6.9 (10.8) 20.7 10.8 3.3 8.6 2.3 4.8
-------------------- --------------- ------------ -------------- -------------- ------------ ------------ ------------ -------------- ------------ -------------- ------------- ------------ ------------ ------------
CAR/ Central Southern Western Central Eastern Zambo Northern Davao Soccsk-
Year Philippines Ilocos Luzon Tagalog Bicol Visayas Visayas Visayas Peninsula Mindanao Region sargen Caraga ARMM
2006 141,711 801 428 1,528 43,591 4,640 3,523 44,099 2,007 5,674 12,104 4,453 10,536 8,327
2007 146,273 801 654 1,748 44,216 5,114 3,692 44,717 2,749 6,288 13,380 5,112 10,890 6,912
2008 152,707 814 682 2,006 44,968 4,905 3,920 45,928 3,435 6,878 14,538 5,606 11,971 7,057
2009 162,576 787 627 2,391 51,352 7,668 1,785 44,024 1,942 4,572 14,782 5,999 20,026 6,621
2010 167,145 848 730 2,670 50,212 8,183 2,023 45,122 2,217 5,369 15,414 6,193 21,205 6,959
2011 172,528 862 853 2,885 51,884 8,463 2,078 45,708 2,397 5,761 15,699 6,337 22,470 7,131
2012 176,793 860 861 3,058 52,032 8,616 3,014 46,148 2,630 6,115 16,240 6,533 23,476 7,210
2013 172,934 774 827 3,129 52,214 8,728 3,041 46,367 2,819 2,694 16,444 6,683 23,653 5,560
2014 176,548 776 800 2,826 52,352 8,830 3,073 46,481 2,953 3,195 18,994 6,277 23,270 6,721
2015 179,858 775 809 2,880 52,493 8,927 3,045 46,680 3,117 3,323 21,204 6,327 23,372 6,906
Average 164,907 810 727 2,512 49,531 7,407 2,919 45,527 2,627 4,987 15,880 5,952 19,087 6,940
% Share 100.0 0.5 0.4 1.5 30.0 4.5 1.8 27.6 1.6 3.0 9.6 3.6 11.6 4.2
AGR (%)
2006-2015 2.7 (0.4) 7.3 7.3 2.1 7.5 (1.6) 0.6 5.0 (5.8) 6.4 4.0 9.3 (2.1)
Destination 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Average % Share
TOTAL 185,450.0 350,078.0 629,656.0 698,335.0 575,668.0 545,113.0 393,474.0 266,632.0 240,862.0 81,539.0 38,504.0 400,531.1 100
-
United
- 226.0 29,706.0 80.0 439.0 - 910.0 4,477.0 1,620.0 656.0 3,811.4 1.0
States
Japan 182.0 2,226.0 2,984.0 15,044.0 2,403.0 684.0 104.0 - 17,158.0 52.0 1,033.0 4,187.0 1.0
United
5,687.0 49.0 1,179.0 7,203.0 2,269.0 11,732.0 8,274.0 24,003.0 17,900.0 30,557.0 4,614.0 11,346.7 2.8
Kingdom
France 1,467.0 4,034.0 - 3,554.0 5,442.0 3,226.0 3,127.0 3,321.0 4,524.0 295.0 185.0 2,917.5 0.7
Hong Kong 14,284.0 145,249.0 406,514.0 455,051.0 361,033.0 270,643.0 181,228.0 169,217.0 92,804.0 47,269.0 26,633.0 216,992.5 54.2
Spain 4,111.0 15,390.0 - 15,837.0 2,992.0 - 5,094.0 503.0 387.0 777.0 4,509.1 1.1
Italy 133,445.0 156,169.0 96,869.0 160,872.0 136,496.0 111,839.0 112,657.0 34,035.0 70,828.0 131.0 445.0 101,378.6 25.3
Lebanon - - - - - - - - - - - -
China 5,715.0 - 68,656.0 27,019.0 57,207.0 114,671.0 69,461.0 20,658.0 32,435.0 239.0 5,594.0 40,165.5 10.0
Nigeria 19,892.0 25,089.0 13,716.0 13,675.0 5,960.0 4,981.0 4,374.0 890.0 3,206.0 1,563.0 9,334.6 2.3
Other
667.0 1,646.0 10,032.0 - 1,427.0 27,337.0 8,245.0 9,528.0 5,888.2 1.5
Countries
*Preliminary
Source: Philippine Statistics Authority
based on the weighted average Pesos/US$ rate
HAND-STRIPPED
------------------ --------------- --------------- --------------- --------------- --------------- --------------- ---------------
Year EF S2 S3 I G H JK
------------------ --------------- --------------- --------------- --------------- --------------- --------------- ---------------
2006 196.67 140.59 110.95 145.73 127.73 87.95 119.04
2007 188.00 154.13 107.75 157.32 135.69 116.70 125.46
2008 - 239.08 181.02 235.17 221.93 168.79 202.22
2009 - 183.16 149.52 205.30 160.93 122.19 165.37
2010 - 172.73 97.04 159.53 153.87 106.34 134.29
2011 - 188.02 154.93 189.70 170.55 144.36 157.43
2012 - 196.69 148.00 195.10 173.98 117.79 117.62
2013 - 220.54 141.21 184.69 174.14 135.20 152.42
2014 - 210.26 180.96 193.40 189.28 178.07 168.11
2015 - 249.48 199.60 195.67 206.09 199.34 192.49
------------------ --------------- --------------- --------------- --------------- --------------- --------------- ---------------
SPINDLE-STRIPPED
------------------ --------------- --------------- --------------- --------------- --------------- --------------- ---------------
Year EF S2 S3 I G H JK
------------------ --------------- --------------- --------------- --------------- --------------- --------------- ---------------
2006 205.00 143.22 112.70 141.47 125.97 106.18 121.98
2007 225.00 157.69 127.03 158.32 137.05 120.16 143.75
2008 - 238.94 214.70 227.28 211.50 - -
2009 337.51 183.77 - 193.07 160.00 158.00 -
2010 - 164.56 155.68 170.06 154.00 140.00 -
2011 - 189.87 161.33 202.04 181.50 151.00 -
2012 - 192.25 - - 174.00 - -
2013 - 171.23 166.87 236.26 188.17 - -
2014 - 223.86 169.96 228.14 - - -
2015 - 270.12 195.00 - 238.12 - -
------------------ --------------- --------------- --------------- --------------- --------------- --------------- ---------------
* replaced Y1 & Y2 which were abolished
** replaced O & T which were abolished